Scrutiny Signals Strategic Steel Shift

POSCO Group, a leading South Korean steel conglomerate, has launched reviews to potentially divest its Suzhou- based electric steel sheet subsidiary in China and its construction-related subsidiary in Vietnam. The move sits at the heart of a sweeping strategic plan initiated under Chairman Jang In-hwa to offload underperforming or non-core assets.

Chinese Joint Venture Stands Under Spotlight

Established in 2005, Suzhou POSCO-CORE Technology manufactures electric steel sheets and motor components for eastern China. POSCO INTERNATIONAL holds 50.8 % of its equity, while POSCO, POSCO Mobility Solution, and P-ASIA hold the remaining shares. The company is now in discussions to transfer its stake to Guangdong WCAN Magnetic Materials Co Ltd .

Vietnamese Construction Entity Evaluation Ensues

POSCO E&C Vietnam was founded in 1995 through a joint venture with the state-owned Lilama group. POSCO E&C now owns 100 % of its shares. The company is exploring the sale of this pipeline infrastructure and construction arm to streamline its portfolio and concentrate on strategic industrial operations .

Directors Declare Discipline During Downturn

POSCO reported robust financial results in 2024, with KRW 72.7 trillion ($54 billion) in revenues, yet operating profit slumped by nearly 39 % to KRW 2.17 trillion ($1.6 billion). The downturn was driven by weak steel and battery markets, and oversupply pressure from China.

Divestment Drive Deployed

The broader restructuring strategy involves the disposal of 61 non-core and low-yield subsidiaries as POSCO seeks to generate KRW 1.5 trillion ($1.1 billion) through asset sales this year. The group has already divested 45 assets last year, raising KRW 662.5 billion ($480 million), with more planned in 2025.

PZSS Sale Illustrates Prioritisation

POSCO’s divestment blueprint notably includes its restructuring of PZSS, a profitable stainless steel joint venture in China. Although once a power asset, PZSS faced losses in 2023, prompting a re-evaluation and eventual sale to improve liquidity and recalibrate focus.

Growth Redeployment at Core

Funds from these divestments are earmarked for future investments in core sectors such as integrated steel plants in India and battery materials, where POSCO is expanding operations in collaboration with partners like JSW and targeting high‑growth EV markets.

Performance Prognosis & Path Ahead

POSCO anticipates its restructuring will shore up financial stability and recover operational momentum. With a retooled balance sheet and investment redirected toward high‑return ventures, the company expects improved performance in the latter half of 2025.

Key Takeaways

• POSCO is reviewing the sale of its Chinese Suzhou electric steel joint venture and its Vietnamese construction subsidiary as part of strategic restructuring.

• The group plans to divest 61 low-profit and non-essential assets to raise approximately KRW 1.5 trillion ($1.1 billion) in 2025.

• Sales of assets like PZSS JV support reinvestment in core areas such as Indian steel plants and EV battery materials projects.